CARD SHARP
Financial inclusion is still low in Mozambique, but a program to install cashless mini ATMs could provide a solution for improving financial access, especially in rural areas.
According to the World Bank report “Enhancing Financial Capability and Inclusion in Mozambique: A Demand-Side Assessment" (2014), only 52% of Mozambican adults have used banking products or services. The reasons for this vary, from lack of financial education or funds to the walking distance between households and the closest bank branch. In fact, Mozambique is a big and still largely rural country and, consequently, even stocking ATMs with cash is a relatively expensive process.
An interesting project for the coming years that will improve access to financial services and decrease the average distance between people and banking services is the cashless or mini-ATMs project. TBY learned about this development for the first time with Carlos García, General Director of Soluções. He told TBY that the project was imminent and that the software was currently being tested and finalized. These ATMs look like regular ATM devices, but do not provide cash, instead giving users a coupon, slip, or voucher that can be used to buy or get money from a cashier at a shop. This is an advantage both for clients and cashiers, as it decreases direct cash handling. Geographically, this project is most likely to improve daily life in rural areas, as cities already have easier access to regular ATMs or bank branches.
TBY also talked to Carlos Street, Managing Director of Interbancos, the company that has developed and will install and maintain these cashless ATMs. He explained that the machines are smaller and cheaper than regular ATMs but have all the same functionalities. In fact, the mini ATMs will accept transactions with or without cards, and can be used to carry out service claims, buy electricity, or pay for other utilities. In the coming two years, Interbancos expects to install about 600 to 700 machines across the country.
According to Street, this idea was inspired by the use of POS machines in South Africa as a way of withdrawing money. “However here [in Mozambique], this is not the right way to go, as usually it is not the customer who manages the POS but rather the merchant. When the customer sees that they need to manage the POS, they are not totally uncomfortable." He explained to TBY “we took that idea but we changed the POS into a mini ATM that we are trying to make almost the same as a standard ATM. This ensures that the client is not intimidated by the machine, especially outside urban areas."
It is imperative that this project goes hand-in-hand with financial education because, after all, there is no point in installing devices all over the country if people do not know how to use them or do not understand the operations that can be done. This project has the potential to benefit not only direct users but also the government's savings as it will bring individuals and SMEs into the formal market. According to a FinScope survey (2012), around 75% of the micro and SMEs in the country are financially excluded. Despite the low financial inclusion index, Street told TBY that Mozambique has “almost every kind of product in electronic banking, including prepaid, credit cards, debit cards, and national and international wallets." He explained that the next step would be a virtual POS, meaning that payments could be made without any POS using a cell phone or some other device.
It is surprising that most African countries are more advanced in terms of mobile banking than some countries in the occidental world and that customers make regular payments by using their phone. Mozambique in particular is one of the few examples where the financial sector is the owner of a mobile wallet called Cónta Móvel, connected by Interbancos system. This system competes with the wallets of cell phone operators such as Vodacom's mPesa or Mcell's mKesh. The number of people using the mobile wallet system in Mozambique is currently estimated to be at around 1 million, but very few people are optimistic about these numbers growing exponentially unless the different wallet networks are integrated.
CARD SHARP
TABLE OF CONTENTS
Review: Economy
Much to Gain
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Foil Plans
Mozambique is the second-largest producer of aluminum in Africa and the 14th in the world. Since 2000, it has been producing aluminum for export, and in 2015 Midal Cables opened a factory near Mozal; the country's largest aluminum smelter. This could be the start of a Mozambican aluminum value chain.
read articleInterview
Ben James, Managing Director, Baobab Resources
TBY talks to Ben James, Baobab's Managing Director, resident in Mozambique. A geologist by training, Ben has been directly involved with the development of the Company's Tete Project from a greenfields iron ore discovery to an asset on the verge of corner-stoning Mozambique's nascent steel industry.
read articleFocus: Aluminum
Aluminum Legacy
Mozambique is the second-largest producer of aluminum in Africa and the 14th in the world. Since 2000, it has been producing aluminum for export, and in 2015 Midal Cables opened a factory near Mozal; the country's largest aluminum smelter. This could be the start of a Mozambican aluminum value chain.
read articleInterview
Hon. Jorge Olívio Penicela Nhambiu, Minister, Science and Technology, Higher and Technical Vocational Education (MCTESTP)
TBY talks to Hon. Jorge Olívio Penicela Nhambiu, Minister of Science and Technology, Higher and Technical Vocational Education (MCTESTP), on bringing science and technology to rural areas and increasing research in the country.
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Digital Decisions
Between 2015 and 2016, Mozambique fell five positions in the World Bank's Ease of Doing Business Index. The government is investing in the GovNET and e-BAU platforms to facilitate procedures and cut the costs of acquiring business licenses and improving services provided to the public.
read articleReview: Health
Time for a check-up
Mozambique's healthcare budget rose to $561.5 million in 2015, an increase of 1.1% on expenditure in 2014, accounting for 10.2% of the state budget. Total healthcare expenditure in 2014 was $477.5 million. The Ministry for Health oversees the sector and is responsible for setting the budget each year.
read articleInterview
Dr. João M. Carvalho Fumane, Director General , Hospital Central de Maputo (HCM)
TBY talks to Dr. João M. Carvalho Fumane, Director General of Hospital Central de Maputo (HCM), about the range of services on offer and what is being done to further excellence in the health sector
read articleInterview
Hon. Jorge Ferrão, Minister, Education and Human Development
<span style="line-height: 1.6em; background-color: initial;">TBY talks to Hon. Jorge Ferrão, Minister of Education and Human Development, on the goals of the ministry, the role of local languages, and tackling teacher absenteeism.</span>
read articleInterview
Prof. Doctor João Leopoldo da Costa, Rector, Instituto Superior de Ciências e Tecnologia de Moçambique (ISCTEM)
TBY talks to Prof. Doctor João Leopoldo da Costa, Rector of Instituto Superior de Ciências e Tecnologia de Moçambique (ISCTEM), on the perils of the internet on education and the quality of its high school.
read articleReview: Tourism
Mozambeach
With white-sand beaches, scuba diving, and game reserves among its wide range of accommodation, Mozambique is a goldmine for tourism. However, to attract the number of tourists the country is aiming for, and entitled to, it will have to compete with its considerably more popular neighbors.
read articleReview: Legal
Smart Choices
Foreign investments are sources of capital, foreign exchange, and technical know-how for developing countries such as Mozambique. Over the past three decades, Mozambique has been successfully striving to ensure a favorable legal framework for foreign private investment.
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